Zomato has finally figured out a way to make more money in India

Order all of it online.
Order all of it online.
Image: Reuters/Amit Dave
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Zomato won’t remain just a restaurant search service in India for much longer.

Next month onwards, the Indian startup will allow users to place orders through its mobile app—and will invest Rs311 crore ($50 million) to build up the service into an additional revenue stream.

The Gurgaon-based company is already testing the new platform and expects a formal launch by Mar. 16 with about 2,000 restaurants. That number, Zomato said, will grow to 10,000 over the next three months as it enrols more partner-restaurants and gives them an iPad each to receive and process the orders.

For Zomato, which so far relied on advertisements to make money, this opens up another revenue stream in a key market that has thrown up regulatory challenges.

In 2014, the startup had to let go of its plans of introducing its mobile payments service in India because of the Reserve Bank of India’s insistence on two-step authentication for card payments. In February, the service debuted in Dubai, where customers now use Zomato to pay their restaurant bills while the company retains a cut.

With the new service in India, too, Zomato will charge a certain fee for each order based on customer feedback. For instance, it will charge a 7.5% fee if the restaurant has a five-star rating, and the fee can go up to 15% if the feedback on the establishment is poor.

To begin with, the company hopes to process 40,000 orders every day, which it expects won’t be particularly difficult since it has about 400,000 daily visitors to its India site. ”We are providing a tech platform. We are not getting into the logistics,” a company spokesperson told Quartz.

Valued at $660 million, Zomato has been using much of its initial funding to aggressively expand in international markets.

In January, the Indian startup acquired Mekanist, a Turkish restaurant search company and bought US-based restaurant search guide Urbanspoon for $52 million—its biggest ever deal. It is now present in 22 countries, making it one of those rare Indian startups with a global presence.